Chinese banks lent out much less money in 2025 than in recent years — the lowest amount since 2018. That’s a sign that people and businesses don’t really want to borrow, even though loans are available.
As per reports published by Reuters: In December, banks lent out more money than people expected. This happened mainly because companies took more loans. At the same time, households were still borrowing less money, including for home loans, but the drop was smaller than in the previous month. This improvement could be an early sign that a government plan worth 500 billion yuan, aimed at supporting projects and encouraging investment, is starting to have an effect.
Why borrowing is weak?
Borrowing is weak mainly because of problems in the housing market. China’s property sector has been struggling for a long time, so people don’t want to take home loans and property developers are not building or expanding much.
Consumers are also being careful with their money. They are spending less and trying to avoid taking on new debt. Private businesses are cautious too. Many companies are unsure about the future, so they are delaying investments and not borrowing much.
Because of this weak private borrowing, the government is trying to help by issuing more bonds and spending money on projects to support the economy.
What policymakers are doing?
The central bank has already lowered some interest rates to make borrowing cheaper. Officials say they can lower rates even more and reduce the amount of cash banks are required to keep if needed. More support for the economy is likely, especially because growth is expected to slow down further in 2026.
China is selling a lot more to other countries than it is buying from them, so it has a big trade surplus. But even though exports are strong, people in China aren’t spending or borrowing much, so the strong sales aren’t helping the domestic economy.
